Combatting Fraud & Theft in the Automotive Industry
For those businesses within the automotive industry, ethics hotlines can be a huge asset for combatting fraud and theft. While the theft may look different in a dealership or auto manufacturing environment than in other industries, the consequences of not catching fraudulent activity can still be detrimental to the bottom line.
Here are a few additional ethics hotline benefits to consider, especially if you’re in the automotive industry yourself.
Employees, for the Most Part, Are Honest
Even if you believe 99 percent of your automotive workforce is honest, you should take measures to protect your company from the remaining potential violators. Reynolds & Reynolds talks about the triangle of fraud and theft in terms of why employees steal in the first place. If there is motivation, for example, like a non-work-related struggle driving a need to do something unreasonable, corrupt behavior can happen. The second point of the triangle refers to the justification, whereas a thieving employee might feel entitled to take this fraudulent action, maybe because of poor manager review or denied promotion. And thirdly, the final point of the triangle exposes the system opportunity or gap in your company operations that will allow a fraud or theft attempt to go unnoticed.
If you’re wondering how many of these triangle points apply to your automotive company, you might need to also consider adding an ethics hotline. The honest and reliable 99 percent can report anonymously when violators cross the line.
The 5 Most Common Theft Violations
You might assume that theft predominantly happens in retail-related workplaces. But aside from the petty theft often taking place there, you also need to consider data theft, skimming fraud, cash larceny, and fraudulent disbursements, as well. Smaller criminal activities, like siphoning office supplies to more serious violations, including mismanaging the time clock, can all contribute to lost revenue. Having an ethics hotline in place can curb this kind of behavior and deter it when employees know such a whistleblowing platform is in place.
Fraud Can Happen at Dealerships & Auto Retailers, Too
In general, some reports suggest that as many as 75 percent of all employees have stolen from their employers at least once. Car dealerships and auto retailers are not immune from such fraudulent activity, either. While it’s not likely that an employee drives off the lot with a new car unnoticed, there is still a potential opportunity for data theft and cash larceny. Ethics hotlines for dealers allow for a whistleblowing platform to help prevent such costly “bad apple” behaviors. Anyone who witnesses a theft or company damaging behavior can immediately report it anonymously and without fear of retaliation.
Today’s Automotive Workplace Is Different
The stats before the pandemic were staggering enough. The 2019 National Retail Security Survey reported the average revenue loss per fraudulent employee was roughly $1,377. The Association of Certified Fraud Examiners also shared that nearly 90 percent of occupational fraud causes a financial loss average of $114,000. Now consider the changing economy and pandemic climate of today.
Many automotive industry leaders are still experiencing hardships caused by factory shuttering, supply chain strains, and a depleting workforce. In addition, employees who are facing rising costs of living or burdening healthcare expenses are becoming more desperate. These factors can contribute to a higher rate of on-the-job theft or fraud, even more than usual.
Make sure that you leverage the many benefits of incorporating an ethics hotline to combat the temptation and opportunity for theft and fraud in your automotive-related business.